In 1970, Raymond Damadian, M.D., made the discovery that is the
basis for magnetic resonance (MR) scanning that there is a marked
difference in relaxation times between normal and abnormal tissues
of the same type, as well as between different types of normal tissues.
This seminal discovery, which remains the basis for the making of
every MRI image ever produced, is the foundation of the MRI industry.
Dr. Damadian published his discovery in his milestone 1971 paper
in the journal Science (Science 1971,171,1151) and filed the pioneer
patent for the practical use of his discovery in 1972.
The MRI scanner uses these relaxation differences in diseased tissues
such as cancer and in normal tissues to supply and control the brightness
of the pixels that comprise the MRI image. These relaxation differences,
which do not exist in any other imaging modality, provide the exceptional
contrast and beauty found only in MRI images (10 to 30 times that
of x-ray). The significance and importance of Dr. Damadian’s
discovery in the origination of MRI was acknowledged by the U.S.
Supreme Court in its 1997 decision, when the Court enforced Dr.
Damadian's original patent (U.S. Patent #3,789,832) that patented
the relaxation differences and their use in scanning.

With the aid of his post-graduate assistants, Doctors Lawrence
Minkoff and Michael Goldsmith, Dr. Damadian went on to build Indomitable,
the first MR scanner, which was conceived to take advantage of the
relaxation differences among the body's tissues. Indomitable produced
the first human image, that of Larry Minkoff's chest, on July 3,
1977 and the first scans of patients with cancer in 1978. Indomitable
has since assumed its rightful place in the Smithsonian Institute.

FONAR was incorporated in 1978, making it is the first, oldest
and most experienced MR manufacturer in the industry. FONAR introduced
the world's first commercial MRI (a whole-body MRI scanner) in 1980,
and went public in 1981.

In 1982, FONAR introduced its patented iron-core technology, which
is the basis for all Open MRI scanners. In 1984, the company invented
Oblique Imaging, providing medical technology the means to produce
multiple images "at any angle," which was never before
possible in medical imaging. In 1985, the Multi-Angle Oblique (MAO)
scanning protocol, an innovative, dramatic extension of FONAR's
Oblique Imaging, was invented and patented.

In 1985, the FONAR MRI scanner at the UCLA Medical Center became
the world's first MRI in which an interventional surgical procedure
was performed. That same year FONAR introduced the world's first
mobile MRI.

In 1988, Dr. Damadian was awarded the National Medal of Technology
by President Ronald Reagan, which he shared jointly with Dr. Lauterbur,
for "their independent contributions in conceiving and developing
the application of magnetic resonance technology to medical uses,
including whole-body scanning and diagnostic imaging." Less
than one year later, Dr. Damadian was inducted into the National
Inventors Hall of Fame of the United States Patent Office for his
pioneer patent of MR scanning, joining a select group of renowned
pioneers, including Orville and Wilbur Wright, Henry Ford, Thomas
Edison and Alexander Graham Bell, whose inventions have revolutionized
our nation and society.

In 1992, FONAR began to utilize the legal process to protect its
patents and intellectual property. FONAR has successfully obtained
satisfaction from nearly every one of its competitors in the MRI
industry, including giant multi-nationals such as Toshiba, Siemens,
Shimadzu and Philips. In May 1995, after a lengthy legal battle
with General Electric, FONAR won a jury decision on two of its patents,
the Multi-Angle Oblique patent and the Cancer Detection patent.
These victories were upheld by the Federal Circuit Court of Appeals
in February of 1997. On May 27, 1997, the U.S. Supreme Court ordered
GE to pay FONAR. GE paid FONAR $128,705,766 for its infringement
of FONAR's patents. On October 6, 1997 the U.S. Supreme Court rejected
GE's final attempt to reverse the decision.

In 1996, FONAR introduced the Stand-Up™ MRI, the world’s
only whole-body MRI scanner with the ability to perform Position
Imaging ™ (pMRI™), i.e. patients can be scanned standing,
sitting, bending or lying down. With its unique ability to scan
patients in weight-bearing postures, the FONAR Stand-Up™ MRI
has identified pathologies that had gone undetected on conventional,
lie-down MRI scanners. Because of its unique geometric design, the
FONAR Stand-Up MRI is remarkably spacious and non-claustrophobic.
There is nothing in front of the patients’ faces of over their
heads to create a “closed-in” feeling. Patients typically
sit comfortably watching a 42” TV throughout the scanning
procedure.

Today, FONAR's works-in-progress OR-360º ™, a room-size
MRI, will allow surgeons, along with their assistants and equipment,
to operate without obstruction inside the scanner's magnet, capitalizing
on the MRI’s exceptional soft tissue detail to guide their
surgery.

Headquartered on Long Island, New York, with over 400 employees,
FONAR has installed 300 MRI scanners worldwide, including installations
in Europe, India, China, Korea, Australia, Saudi Arabia and Mexico.
The Company boasts a first-rate, world-wide field service organization.
President and Chairman Raymond V. Damadian continues to provide
FONAR its vision and leadership.

FONAR is proud of its history and pioneering achievements. The
Company conceived the scientific basis of MRI, built the world's
first commercial MRI, and has remained a leading innovator in MRI
technology. Now, with its introduction of the Stand-Up MRI, “the
Company that invented MR Scanning, just reinvented it.”

In October of 2004, the company changed the product name of the
Stand-Up™ MRI to the Upright™ MRI.

FONAR will continue to serve its shareholders, employees, and customers
and to contribute to the health and well being of millions of people
around the world.